Hardworking Iowans and Americans living paycheck to paycheck are feeling left behind and deserve tax relief. And for too long, our broken tax system has favored filling the coffers of the federal government in Washington under the misguided assumption of government knowing best how to spend your money.
This week, Republicans in Congress released a framework of a plan to fix our broken tax system to create a fair and simple tax code. Iowans know how to spend their money better than the federal government, which is why I want Iowans to keep more of their hard-earned money for themselves and their families.
Our bloated, 75,000 page tax code is costly and confusing. Ninety-four percent of American families rely on a professional to help them file their taxes and we spend 6 billion hours every year trying to comply with the current tax law. The last time our tax code was overhauled was in 1986. You remember what you were doing that year? Think about how much our society and economy have changed in the past 30 years. A modern age needs a modern tax code.
The foundation of the framework is reducing the current seven tax brackets for individuals down to four: 0%, 12%, 25% and 35%. Additionally, we propose to double the standard deduction – $12,000 for single filers and $24,000 for married couples. This is significant for Iowans and their families because it means the first $12,000 of income for singles filers or $24,000 of income for married couples will be tax free. This puts more money in the pockets of Iowans to spend, save or invest.
The proposed enhanced child tax-credit allows more middle class Iowans to qualify for the full $1,000 credit which lessens the burden of working Iowa parents.
Main Street job creators keep Iowa’s economy running but have been harmed by the current tax code. Our plan reduces taxes on small businesses to no more than 25%. This is the lowest rate since the 1930s! It allows Iowa entrepreneurs, manufacturers, and small business owners to have the confidence and certainty to invest in their businesses, create even more jobs, and better our communities.
This means the owners of a small business in Atlantic can build the expansion to their business they’ve been waiting years to do, but couldn’t because of the burdens of our current tax structure.
Under our plan, farmers and small business owners will be able to expense all of their capital investments, rewarding them for investing in their communities. And finally, the plan proposes to repeal the death tax to allow families to pass on the farm or small business to the next generation without another tax punishment from Washington, DC.
The United States has one of the highest corporate tax rates in the world at almost 40%! This directly stifles the full potential of job and economic growth in our nation and incentivizes companies to move capital and jobs overseas. We must end the current tax system which encourages companies to move jobs overseas. We must establish an American model bringing jobs and revenue and investment back home. In our plan, we propose bringing the corporate tax rate lower than the global average – while ending many corporate tax deductions, credits and incentives and simplifying the tax code. This will help level the playing field for companies to stay and grow in American communities, creating good paying American jobs, and keeping tax revenues here in America.
We keep the mortgage interest deduction and charitable deduction to encourage home ownership and giving to causes dear to our hearts. We end the Alternative Minimum Tax (AMT) which has caught many Iowans in a horrible tax web.
These are all just a few of the proposals and changes in the framework released earlier this week. There are going to be some provisions many have been waiting for a long time. There are going to be some provisions some may disapprove of or question. And that’s okay.
It’s important to remember, this is a proposed framework and the beginning and not the end of a policy or process. There are likely to be some changes – new additions, deleted proposals, and tweaked policies. And after the House acts, the Senate will act.
And it’s important for Congress to act and make the tax code work for Iowans and their families by letting them keep more of their paycheck, grow the economy and create great jobs, and reduce the power and bullying of the IRS by simplifying the tax code and filing process for Iowans.
So, as we start this process and build upon this framework and formally introduce a bill and go through the legislative process, I want to hear from you with your thoughts – whether they be critical, complimentary or questioning. And to better understand and find more details about the proposed tax framework, please check out this informational link – www.young.house.gov/FairAndSimple– and give me your feedback. Your thoughts and voice in this policy and process is important to me.